New age therapy

The Employers’ Forum on Age has devised a ‘toolkit’ to help employers
age-proof their policies. Royal Bank of Scotland has tried it out and shared
the results with Sarah Jane North

In just over three years’ time, age discrimination in the workplace will be
illegal. New laws will require employers to remove age specifications from job
advertisements and application forms (as some naively believe), and conduct a
complete overhaul of all employment policies, including recruitment, training,
management development, rewards and benefits.

Complacent employers who bury their heads on this issue could find
themselves with a massive compensation bill – an estimated £193m in the first
year of the new regulations becoming law, according to the Employers’ Forum on
Age (EFA).

Few employers may be aware of the scale of the age discrimination problem.
But in a survey conducted by the Chartered Institute of Personnel Development
(CIPD) last year, 14 per cent of UK staff said they believe they have been
treated unfairly because of their age at some point in their working lives. If
all of these people were to take a claim under the new laws, the compensation
bill would total a staggering £73bn.

The EFA is calling on employers to take action now by age-proofing their
employment policies. In conjunction with a group of household-name employers,
it has devised a toolkit to ensure employment decisions and policies are based
on ability, not age.

"It is essential all businesses carry out a policy review to see where
age bias might be lurking," said EFA chairman Howard Davies at the
toolkit’s launch in April.

"Many employers are under the impression that the 2006 age
discrimination legislation will require them to make only minor adjustments to
their recruitment and retirement policies. They are in for a shock.

"We hope that the EFA toolkit will be a catalyst for change, helping to
take businesses beyond mere compliance with the new laws to the forefront of
best practice," he added.

Playing a leading role in designing, developing, piloting and implementing
the toolkit has been the Royal Bank of Scotland Group. The toolkit, One Step
Ahead, consists of 20 checklists covering a range of essential employment
issues, including recruitment, training, promotion, harassment, retirement and
redundancy. It is designed to help employers view their policies through an
‘age microscope’ to identify where age bias may currently impact on employment
policy or practice, and to suggest options and ways to introduce age neutrality
across the business prior to the new legislation.

"Using the toolkit has been an invaluable exercise in helping us
identify areas that we needed to work on. This positions us well to maximise
the business benefits that we so clearly see from having an age-diverse
workforce and from recognising diversity in our customer base," said RBS
group diversity manager Amanda Jones at the launch.

Using the toolkit, RBS identified 12 of the 20 areas of review suggested as
having particular relevance across all the group’s businesses, and these became
the priority areas for review. They included recruitment, training,
people-friendly policies and management issues.

The review was managed by Jones, reporting directly to the group HR
director, thereby ensuring executive level buy-in to the review and the
authority to fully engage with each of the business divisions.

RBS tailored the EFA toolkit to its own in-house processes, which meant that
managers were familiar with the reporting procedure and reassured of the value
of their participation, and guaranteed that they would act on the results.
Furthermore, it ensured consistency in evaluating their responses.

Jones designed a ratings matrix to match the existing risk assessment
system, then used this to score activities that had been identified as
priorities for review.

This scoring system allowed Jones’ team to collate the results according to
each business division, identifying as they went areas of best practice and
sharing these across the group.

The analysis revealed:

– A need for greater diversity (including age diversity) training at all
levels

– The need to improve monitoring and measurement of age diversity. The
policy review indicated that measurement was ‘often possible but not always
carried out’

– Evidence that some parts of the HR department and senior managers were
unaware of the forthcoming age discrimination legislation and that others were
under the impression that the legislation would just protect older workers.
They were not aware that future age laws would cover employees and applicants
of all ages

– Good practice in a number of divisions and policy areas

– That some current practices or policies might need to be ‘justified’ under
the future legislation. For example, the school leaver programme targets a
specific age group and under the new legislation would require a ‘demonstrable
and objectively justified business case’

– The need to improve communications across the group on age diversity

A clear timetable for action was drawn up, with each area of action
prioritised. Among the next steps RBS plans to take will be:

– The development of a group-wide diversity training strategy

– A further review of management information systems with a view to
incorporating regular reporting on core measurements (as suggested by the EFA
toolkit). Specific accountability and reporting structures will be put in place
to ensure all business units are aware of their status with respect to age
diversity

– The development of a group-wide diversity communication strategy

– The development of proposals to offer employees greater flexibility for
retirement. Proposals are expected to be submitted later this year

– A review of initiatives that target specific age groups (for example
recruitment programmes) to decide if a justifiable business case exists

– The development of an action plan to ensure that all issues identified in
the audit are acted on.

"We have been a core member of the EFA for a number of years and see
them very much as a strategic partner in devising, developing and delivering
our diversity strategy. We saw the toolkit as something we could grab hold of
and help to promote and develop," says RBS diversity manager Nick Goss.

"The toolkit helps to demonstrate that age diversity is really an
opportunity rather than a threat. Society’s demographics are changing rapidly
and this is reflected in the needs of our employees.

"The toolkit is very flexible, not prescriptive, and can bend and mould
to the requirements of different organisations."

Aerospace giant BAA, another EFA member, also trialled the toolkit and
discovered areas it too needed to tackle. The audit exposed a lack of understanding
among managers of the subtle nature of age discrimination. It also challenged
the accepted view that to reach positions of influence an employee had to be at
the top end of the age range. The audit also identified how processes to
pinpoint potential discrimination had only focused on minority groups.

After gathering responses from across the company to the 10 Essential Age
Proofing Questions (see box), HR developed an action plan to make the necessary
changes to policy and practice over the next two years, with all changes
aligned to the overall HR strategy and business strategy. The plan includes
making progress on the design of policies to allow post-retirement working, and
a move to end compulsory retirement ahead of the 2006 deadline.

Temporary employment specialist Manpower also took part in devising the
toolkit and is now using it to review its own company age policy and retirement
plans. "Our review will further ensure that the best workers in the labour
market are recruited on the basis of skills and ability, not age," says
Ruth Hounslow, head of public affairs.

The company has already broken several age stereotypes at its call centre in
Selkirk in Scotland. The average age of people working in call centres is just
24; at Selkirk, it is 36, and the average age of team and senior managers is
41.

The centre also employs a greater proportion of older workers than the
average – one in seven is aged over 50; a third are over 40 and two-thirds are
over 30. In an industry dominated by part-time female workers, more than 50 per
cent of Selkirk’s staff are male, and where the industry averages a horrendous
turnover rate of between 40 and 50 per cent, at Selkirk it is virtually
non-existent, standing at less than 1 per cent.

10 essential age-proofing questions

The questions are designed to reveal
issues of possible concern. If you answer ‘no’ to any of them, the EFA says you
should urgently consider prioritising policy review in this area. A ‘no’ may
imply the organisation is vulnerable under the forthcoming legislation. If you
answer ‘yes’, you should be able to provide evidence to back your answer –
written, statistical or otherwise – as you may be required to provide such
evidence at tribunal.

– Can you justify the use of specified periods of experience
(for example ‘two years’ experience required’) in your job advertisements?

– Have you removed age as a selection criterion for redundancy?

– Do you have evidence that all age groups have access to
flexible working opportunities?

– Can you provide evidence that salaries and benefits are not
age-related?

– Are you able to monitor by age the drop-out rate from
different stages of your selection process?

– Are you able to collate and analyse information from exit
interviews by age?

– Is the same contractual retirement age applied to everyone in
the organisation?

– Are you aware of different sickness absence rates among
different age groups?

– Do you assess the intake of your graduate, fast-track or
management development programmes for potential age bias?